2021/2010(INI) Digital taxation: OECD negotiations, tax residency of digital companies and a possible European Digital Tax
Lead committee dossier:
Progress: Procedure completed
| Role | Committee | Rapporteur | Shadows |
|---|---|---|---|
| Lead | ECON |
SCHWAB Andreas ( EPP),
HLAVÁČEK Martin ( Renew)
|
FUGLSANG Niels ( S&D),
CARÊME Damien ( Verts/ALE),
DONATO Francesca ( ID),
JAKI Patryk ( ECR),
SCHIRDEWAN Martin ( GUE/NGL)
|
| Committee Opinion | BUDG |
FERNANDES José Manuel ( EPP),
HAYER Valérie ( Renew)
|
Hélène LAPORTE ( ID)
|
Lead committee dossier:
Legal Basis:
RoP 54, RoP 57
Legal Basis:
RoP 54, RoP 57Subjects
Events
2021/09/27
EC - Commission response to text adopted in plenary
Documents
2021/04/29
EP - Decision by Parliament
Details
The European Parliament adopted by 549 votes to 70, with 75 abstentions, a resolution on digital taxation: OECD negotiations, tax residency of digital companies and a possible European Digital Tax.
Challenges arising from the digitalisation of the economy
The resolution highlighted that current international corporate tax rules are based on principles which were developed in the early 20th century and that taxing rights are mainly based on the physical presence of companies. These rights are no longer suited to an increasingly globalised and digitalised economy, thus enabling numerous harmful tax practices that undermine public finances and fair competition.
Parliament has repeatedly called for a reform of the international corporate tax system in order to combat tax evasion, tax avoidance and the challenges of taxing the digital economy.
A fairer allocation
On average, digital businesses face an effective tax rate of only 9.5 %, as opposed to 23.2 % for traditional business models. Given that the demand for digitalised services has exploded due to the obligation to operate many tasks remotely in the COVID-19 context, providers of such digitalised services have been placed in a more favourable position than traditional businesses, especially SMEs.
Stressing the need to address the under-taxation of the digitalised economy, Members called for a new and fairer distribution of taxing rights for highly digitalised multinationals and a review of the traditional concept of permanent establishment.
Parliament recalled in this respect its position on the Common Consolidated Corporate Tax Base (CCCTB) aimed at creating a virtual permanent establishment, taking into account where value is created and based on the value and profits generated by users of online platforms. These should be taken into account when defining a new tax nexus to provide an effective remedy against aggressive tax planning and tax evasion.
According to Members, new solutions for taxing the digital economy should preferably tax profits, not revenues.
A global multilateral agreement
Parliament called for an international agreement aiming for a fair and effective tax system. They welcomed the efforts in the G20/OECD Inclusive Framework (IF) to reach a global consensus on a multilateral reform of the international tax system to address the challenges of continued profit shifting and the digitalised economy.
Regretting, however, that the original deadline of the end of 2020 for the conclusion of the international agreement was not met, Parliament called for an early agreement by mid-2021.
Members welcomed the new momentum given to the negotiations by the US administration's recent proposals on a ‘strong incentive for nations to join a global agreement that implements minimum tax rules worldwide’. These proposals include an increase in the minimum tax on global intangible low-taxed income (GILTI) to 21 %.
Parliament called on the Commission and the Council to intensify the dialogue with the new US administration on digital tax policy with the aim of finding a common approach in the framework of the G20/OECD IF negotiations before June 2021.
A call for immediate EU action
Members considered that the tax challenges stemming from the digitalised economy are a global issue and that an agreement at the level of the G20/OECD states is urgently needed to make international coordination possible. An ambitious and harmonised international solution is preferable to a patchwork of national or regional digital taxes bearing potential risks and is significantly more likely to find unanimous support in the Council.
The resolution insisted therefore, that regardless of the progress of the negotiations in the G20/OECD IF, the EU should have a fall-back position and stand ready to roll out its own proposal for taxing the digital economy by the end of 2021.
A digital levy as a new EU own resource
Parliament welcomed the Interinstitutional Agreement of 16 December 2020 (IIA) between Parliament, the Council and the Commission on budgetary discipline, on cooperation in budgetary matters and on sound financial management, including a roadmap towards the introduction of new own resources.
Members recalled the Commission's legally binding commitment to present a legislative proposal for a European digital levy as an own resource by June 2021. They also recalled the commitment by Parliament, the Council and the Commission to follow the steps set out in the roadmap for its introduction by 1 January 2023.
Parliament affirmed that the revenue from the EU digital levy will be part of a basket of new own resources whose proceeds will at least be sufficient to cover, through the EU budget, the future repayment costs (principal and interest) arising from the Recovery Instrument’s grants component.
Documents
2021/04/29
EP - End of procedure in Parliament
2021/04/28
EP - Results of vote in Parliament
Documents
2021/04/28
EP - Debate in Parliament
Documents
2021/03/30
EP - Committee report tabled for plenary
Details
The Committee on Economic and Monetary Affairs adopted the own-initiative report by Andreas SCHWAB (EPP, DE) and Martin HLAVACEK (Renew, CZ) on digital taxation: OECD negotiations, tax residency of digital companies and a possible European Digital Tax.
Challenges arising from the digitalisation of the economy
The report highlighted that current international corporate tax rules are based on principles which were developed in the early 20th century and that taxing rights are mainly based on the physical presence of companies. These rights are no longer suited to an increasingly globalised and digitalised economy, thus enabling numerous harmful tax practices that undermine public finances and fair competition.
A fairer allocation
On average, digital businesses face an effective tax rate of only 9.5 %, as opposed to 23.2 % for traditional business models. Given that the demand for digitalised services has exploded due to the obligation to operate many tasks remotely in the COVID-19 context, providers of such digitalised services have been placed in a more favourable position than traditional businesses, especially SMEs.
In this regard, Members call for new and fairer allocation of taxing rights for highly digitalised multinationals and a revision of the traditional concept of permanent establishment, as it fails to cover the digitalised economy. They stressed that users of online platforms and consumers of digital services are now central elements in value creation by highly digitalised businesses, and that they cannot be shifted outside a jurisdiction in the same way as capital and labour and should therefore be taken into account when defining a new tax nexus to provide an effective remedy against aggressive tax planning and tax avoidance.
According to Members, new solutions to taxing the digital economy should preferably tax profits, not revenues. There is a need to tax multinational corporations on the basis of a fair and effective formula for the allocation of taxing rights between countries according to the report.
A global multilateral agreement
Members called for an international agreement aiming for a fair and effective tax system. They welcomed the efforts in the G20/OECD Inclusive Framework (IF) to reach a global consensus on a multilateral reform of the international tax system to address the challenges of continued profit shifting and the digitalised economy. However, they regretted the fact that the deadline for an agreement, fixed for the end of 2020, was missed.
Negotiations within the IF need to be finalised as quickly as possible till mid-2021 in order to create a consensus among the 137 participating states for having a fair share of taxing the digital economy (pillar 1) and to agree on a global minimum tax that would address the remaining issues of base erosion and profit shifting (BEPS) (pillar 2).
The report called on the Commission and the Council to intensify the dialogue with the new US administration on digital tax policy with the aim of finding a common approach in the framework of the G20/OECD IF negotiations before June 2021.
A call for immediate EU action
It is regrettable that the failure of the G20/OECD Inclusive Framework (IF) to find a solution in October 2020 has prolonged the under-taxation of the digitalised economy.
The COVID-19 pandemic has largely benefited digitalised businesses, mostly those that were able to scale up their operations, while many other businesses, notably SMEs, have suffered, and that it has accelerated the transition to a digitalised economy, thereby further emphasising the need to find multilateral solutions to reform the current tax system in order to ensure that the digitalised economy makes a fair contribution.
Members stressed that tax challenges stemming from the digitalised economy are a global issue and that an agreement at the level of the G20/OECD states is urgently needed to make international coordination possible. They considered that an ambitious and harmonised international solution is preferable to a patchwork of national or regional digital taxes bearing potential risks and is significantly more likely to find unanimous support in the Council.
The report insisted therefore, that regardless of the progress of the negotiations in the G20/OECD IF, the EU should have a fall-back position and stand ready to roll out its own proposal for taxing the digital economy by the end of 2021.
A digital levy as a new EU own resource
Parliament has restated its commitment to the introduction of an EU digital levy as an own resource with large majorities in a series of reports and resolutions. The revenues of the EU digital levy would be intrinsically linked to the open borders of the single market and the ‘digital union’ and would therefore constitute a highly suitable and genuine basis for an EU own resource.
The report maintains that the revenue of the EU digital levy will be part of a basket of new own resources whose proceeds will at least be sufficient to cover, through the EU budget, the future repayment costs (principal and interest) arising from the Recovery Instrument’s grants component, expected to be around EUR 15 billion per year on average and a maximum of EUR 29.25 billion per year from 2028 until 2058, while avoiding a reduction in expenditure for EU programmes.
Lastly, the European Council is urged to endorse a resolute leadership role for the EU in the worldwide endeavour towards fairer taxation by taking swift and determined steps towards introducing a digital levy as an own resource in the course of 2021.
Documents
2021/03/23
EP - Vote in committee
2021/03/17
EP - Committee opinion
Documents
2021/02/26
EP - Amendments tabled in committee
Documents
2021/02/11
EP - Committee referral announced in Parliament
2021/02/11
EP - Referral to associated committees announced in Parliament
2021/02/04
EP - FERNANDES José Manuel (EPP) appointed as rapporteur in BUDG
2021/02/04
EP - HAYER Valérie (Renew) appointed as rapporteur in BUDG
2021/01/26
EP - Committee draft report
Documents
2020/10/28
EP - SCHWAB Andreas (EPP) appointed as rapporteur in ECON
2020/10/28
EP - HLAVÁČEK Martin (Renew) appointed as rapporteur in ECON
Documents
- Commission response to text adopted in plenary: SP(2021)567
- Decision by Parliament: T9-0147/2021
- Results of vote in Parliament: Results of vote in Parliament
- Debate in Parliament: Debate in Parliament
- Committee report tabled for plenary: A9-0103/2021
- Committee opinion: PE663.396
- Amendments tabled in committee: PE681.055
- Committee draft report: PE663.362
- Committee draft report: PE663.362
- Amendments tabled in committee: PE681.055
- Committee opinion: PE663.396
- Commission response to text adopted in plenary: SP(2021)567
Activities
- Fabio Massimo CASTALDO
Plenary Speeches (1)
- José Manuel FERNANDES
Plenary Speeches (1)
- Sven GIEGOLD
Plenary Speeches (1)
- Othmar KARAS
Plenary Speeches (1)
- Paul TANG
Plenary Speeches (1)
- Pedro MARQUES
Plenary Speeches (1)
- Andżelika Anna MOŻDŻANOWSKA
- Marek BELKA
- Mikuláš PEKSA
Plenary Speeches (1)
- Jessica STEGRUD
Plenary Speeches (1)
Votes
Fiscalité de l'économie numérique: négociations au sein de l’OCDE, résidence fiscale des entreprises numériques et une éventuelle taxe européenne sur le numérique - Digital taxation: OECD negotiations, tax residency of digital companies and a possible European Digital Tax - Besteuerung der digitalen Wirtschaft: OECD-Verhandlungen, Steuersitz digitaler Unternehmen und eine mögliche europäische Digitalsteuer - A9-0103/2021 - Andreas Schwab, Martin Hlaváček - Am 1 #
2021/04/28 Outcome: +: 574, 0: 79, -: 48
PPE
The Left
NIA9-0103/2021 - Andreas Schwab, Martin Hlaváček - Am 2 #
2021/04/28 Outcome: +: 648, -: 33, 0: 20
A9-0103/2021 - Andreas Schwab, Martin Hlaváček - Am 3 #
2021/04/28 Outcome: +: 529, -: 102, 0: 70
Fiscalité de l'économie numérique: négociations au sein de l’OCDE, résidence fiscale des entreprises numériques et une éventuelle taxe européenne sur le numérique - Digital taxation: OECD negotiations, tax residency of digital companies and a possible European Digital Tax - Besteuerung der digitalen Wirtschaft: OECD-Verhandlungen, Steuersitz digitaler Unternehmen und eine mögliche europäische Digitalsteuer - A9-0103/2021 - Andreas Schwab, Martin Hlaváček - Proposition de résolution #
2021/04/28 Outcome: +: 549, 0: 75, -: 70
| Amendments | Dossier |
| 296 |
2021/2010(INI)
2021/03/01
BUDG
296 amendments...
Amendment 1 #
Draft opinion Paragraph 1 1.
Amendment 1 #
Motion for a resolution Citation 1 — having regard to Articles 113, 115 and 11
Amendment 10 #
Draft opinion Paragraph 2 2. Regrets the OECD’s failure to find consensus on digital taxation by the end of 2020 as planned; reiterates the importance of a global consensus on digital taxation that will enable us to have a consistent global approach towards tax fairness;
Amendment 10 #
Motion for a resolution Citation 12 b (new) Amendment 100 #
Motion for a resolution Paragraph 5 a (new) 5 a. Reiterates the Parliament’s support for the creation of an intergovernmental tax body within the framework of the UN, which should be well equipped and have sufficient resources and, where appropriate, enforcement powers, and would ensure that all countries can participate on an equal footing in the formulation and reform of a global tax agenda;[1] [1] Recital 341, European Parliament resolution of 26 March 2019 on financial crimes, tax evasion and tax avoidance (2018/2121(INI)), https://www.europarl.europa.eu/doceo/doc ument/TA-8-2019-0240_EN.html
Amendment 101 #
Motion for a resolution Paragraph 6 6. Welcomes the fact that the two pillar approach suggested in the G20/OECD IF does not ring fence the digitalised economy but seeks a comprehensive solution to the new challenges of the digital economy; acknowledges that both pillars are complementary
Amendment 102 #
Motion for a resolution Paragraph 6 6. Welcomes the fact that the two pillar approach suggested in the G20/OECD IF does not ring fence the digital economy but seeks a comprehensive solution to the new challenges of the digital economy; acknowledges that both pillars are complementary, and supports a
Amendment 103 #
Motion for a resolution Paragraph 6 6. Welcomes the fact that the two pillar approach suggested in the G20/OECD IF does not ring fence the digital economy but seeks a comprehensive solution to the new challenges of the digitalized economy; acknowledges that both pillars are complementary, and supports a holistic solution
Amendment 104 #
Motion for a resolution Paragraph 6 6. Welcomes the fact that the two pillar approach suggested in the G20/OECD IF does not ring fence the digital economy but seeks a comprehensive solution to the new challenges of the digital economy; acknowledges that both pillars are complementary, and supports a holistic solution in which one pillar is not adopted without the other;
Amendment 105 #
Motion for a resolution Paragraph 6 6. Welcomes the fact that the two pillar approach suggested in the G20/OECD IF does not ring fence the digital economy but seeks a comprehensive solution to the new challenges of the global and digital economy; acknowledges that both pillars are complementary, and supports a holistic solution in which one pillar is not adopted without the other;
Amendment 106 #
Motion for a resolution Paragraph 6 6.
Amendment 107 #
Motion for a resolution Paragraph 6 a (new) 6 a. Calls on the Commission and the Council to present to Parliament criteria for success on how to judge the future compromises of theG20/OECD IF negotiations serving the European interest and protecting the European tax base; considers in this regard possible criteria might be reaching an inclusive consensus built on clear, acceptable and understandable new principles for digital MNEs so to avoid more red-tape for SMEs and citizens;
Amendment 108 #
Motion for a resolution Paragraph 7 7. Welcomes the
Amendment 109 #
Motion for a resolution Paragraph 7 7. Welcomes the proposal under Pillar One of a new tax nexus and new taxing rights which would create the possibility of taxing multinational enterprises (MNEs) in market jurisdictions, even where they have no physical presence based on their economic activity; underlines that the
Amendment 11 #
Draft opinion Paragraph 2 2. Regrets the OECD’s failure to find consensus on digital taxation by the end of 2020 as planned; nevertheless, welcomes the progress of discussions at the technical level, and calls for a swift agreement by mid-2021;
Amendment 11 #
Motion for a resolution Citation 12 c (new) — having regard to the outcomes of various relevant meetings at the United Nations, including the 2015 Summit on Financing for Development in Addis Ababa 11b ,as well as the ongoing work of the United Nations Committee of Experts on International Cooperation in Tax Matters on Tax Consequences of the Digitalized Economy 11c _________________ 11bhttps://www.un.org/esa/ffd/wp- content/uploads/2015/08/AAAA_Outcome .pdf 11c https://www.un.org/development/desa/fina ncing/sites/www.un.org.development.desa. financing/files/2020- 10/CITCM%2021%20CRP.41_Digitalizati on%2010102020%20Final%20A.pdf
Amendment 110 #
Motion for a resolution Paragraph 7 7. Welcomes the proposal under Pillar One of a new tax nexus and new taxing rights which would create the possibility of taxing multinational enterprises (MNEs) in market jurisdictions, even where they have no physical presence based on their economic activity; underlines that the interaction with users and consumers significantly contributes to value creation in digital business models, and should therefore be taken into account when allocating taxing rights;
Amendment 111 #
Motion for a resolution Paragraph 7 7. Welcomes the proposal under Pillar One of a new tax nexus and new taxing rights which would create the possibility of taxing multinational enterprises (MNEs) in market jurisdictions, even where they have no physical presence based on their economic activity; underlines that the interaction with users and consumers significantly contributes to value creation in digital business models, and should therefore be taken into account when allocating taxing rights; stresses that the scope of these new taxing rights should cover all large MNEs which could engage in BEPS practices, while not creating further and unnecessary burdens on SMEs or increasing the cost of services for users;
Amendment 112 #
Motion for a resolution Paragraph 7 7. Welcomes the proposal under Pillar One of a new tax nexus and new taxing rights which would create the possibility of taxing multinational enterprises (MNEs) in market jurisdictions, even where they have no physical presence based on their economic activity; underlines that the
Amendment 113 #
Motion for a resolution Paragraph 7 a (new) 7 a. Regrets the focus on automated digital services or consumer facing businesses only in the Pillar One proposal as it stands; deplores the role Member States have played in this; considers that the scope of the reform should not only cover highly digital or consumer facing businesses but cover all large firms having the possibility to engage in BEPS practices by exploiting the current international tax frameworks; notes that a too restrictive approach severely undermines the fairness and effectiveness of the proposal; in this regard calls on Member States to push for a high allocation percentage and fair and equal allocation of profits and to drop the delineation between routine and non- routine profits;
Amendment 114 #
Motion for a resolution Paragraph 7 a (new) 7 a. A scope that cover all large MNEs which could engage in BEPS practices and that should include a review clause with phase-in rules concerning the global revenue threshold; recalls that the EU definition of a large multinational group consists of consolidated parent and subsidiary undertakings exceeding the limits of at least two of the three following criteria: a balance sheet of at least EUR 20 000 000, a net turnover of at least EUR 40 000 000 and an average number of employees during the financial year superior to 250;
Amendment 115 #
Motion for a resolution Paragraph 7 a (new) 7 a. Reminds that pillar 1 is at risk of becoming highly complex and calls on the OECD and negotiating Member States to work towards a simple and workable solution;
Amendment 116 #
Motion for a resolution Paragraph 7 b (new) 7 b. Observes that the negotiations under Pillar One might conclude with a limited scope, targeting solely highly digitalized businesses in order to reach a simpler agreement within the limited timeframe; insists that in the event of such outcome, the EU should within the G20 push for a renewed mandate for the OECD to immediately launch a new process to fundamentally revise the flawed international tax system and completely depart from the arm’s length principle for all the large companies; points out that such process could be jointly organized with the UN Tax Committee; emphasises that such process should lead to a fairer distribution of taxing rights among countries;
Amendment 117 #
Motion for a resolution Paragraph 7 b (new) 7 b. A scope covering at least automated digital services and consumer facing businesses, while not creating further and unnecessary burdens on SMEs;
Amendment 118 #
Motion for a resolution Paragraph 7 c (new) 7 c. considers that any minimum rate under Pillar Two should be set at a fair and sufficient level - of at least 20% - in order to effectively discourage profit shifting and prevent damaging tax competition;notes the Independent Commission for the Reform of International Corporate Taxation has even recommended a rate of 25%[1];raises concerns that a low threshold such as 12,5% would likely lead to a global race to the bottom towards this minimum floor for corporate taxation by most countries, which would be damaging for all in the end;calls on the Commission to swiftly put forward a proposal for a minimum corporate effective tax rate at EU level, independently of progress made at international level;deplores that the OECD had to resort to carve-outs which weakens the impact of Pillar Two;however takes note of the compromise found to embed formulaic based substance rules in the minimum tax design and calls on the OECD and Member States to extend this idea to the allocation of the minimum tax rights in order to stop the current artificial and highly unequal separation between resident and source countries; [1] Independent Commission for the Reform of International Corporate Taxation, INTERNATIONAL CORPORATE TAX REFORM: Towards a fair and comprehensive solution, 2019, https://static1.squarespace.com/static/5a0 c602bf43b5594845abb81/t/5d979e6dc5f7c b7b66842c49/1570217588721/ICRICT- INTERNATIONAL+CORPORATE+TAX +REFORM.pdf
Amendment 119 #
Motion for a resolution Paragraph 7 c (new) 7 c. An agreement ensuring sufficient amounts of profits are reallocated to market jurisdictions and that should go beyond the distinction between routine and non-routine profits, which could lead to artificial distinction only. Should the distinction between routine and non- routine prevail in the negotiations, it is to be noted that only a profitability threshold of 8 % would allow for the reallocation of a substantial amount of profits, up to €150 billions;
Amendment 12 #
Draft opinion Paragraph 2 2.
Amendment 12 #
Motion for a resolution Citation 15 a (new) — having regard the OECD/G20 Base Erosion and Profit Shifting Project Economic Impact Assessment on Tax Challenges Arising from Digitalisation publish in October 2020,
Amendment 120 #
Motion for a resolution Paragraph 7 d (new) 7 d. An allocation percentage of minimum 20 % of profits that would allow for a fair portion to be reallocated to market jurisdictions, which would ensure a meaningful reform and deter aggressive tax planning strategies;
Amendment 121 #
Motion for a resolution Paragraph 7 e (new) 7 e. A limited recourse to carry forward regimes for losses, as those could undermine the impact of the reform;
Amendment 122 #
Motion for a resolution Paragraph 7 f (new) 7 f. Recommends that policy options defended by Member States in the negotiations should reduce complexity, therefore supports simplified administrative processes for MNEs subject to the new taxing rights, also in view of lightening the burden of implementation for Member States, taking into account Member States not involved in tax arrangements distorting competition such as so-called 'sweetheart deals'; believes that a more complete overhaul of the Arm’s Length Principle (ALP) would be appropriate; is concerned that maintaining the ALP in the reform’s context could add opportunities to circumvent the newly agreed rules;
Amendment 123 #
Motion for a resolution Paragraph 7 g (new) 7 g. Highlights that the implementation of an efficient and comprehensive international reform will be eased by the access to country-by-country reporting information; notes that, to date, many countries do not have access to such information; welcomes the recent efforts of the Council Presidency on the Proposal for public country-by-country reporting;
Amendment 124 #
Motion for a resolution Paragraph 8 8. Calls on the Commission and the Council to intensify the dialogue with the new US administration on digital tax policy with the aim of finding a common approach in the framework of the G20/OECD IF negotiations before June 2021; calls on the
Amendment 125 #
Motion for a resolution Paragraph 8 8. Calls on the Commission and the Council to intensify the dialogue with the new US administration on digital tax policy with the aim of finding a common approach in the framework of the G20/OECD IF negotiations before June 2021; calls on the Council to oppose the ‘safe harbour’ clause, proposed by the US administration, which risks undermining the reform efforts; welcomes the recent declaration of the new US Secretary of the Treasury Janet Yellen to re-engage actively in OECD negotiations with the view to achieve an agreement;
Amendment 126 #
Motion for a resolution Paragraph 8 8. Calls on the Commission and the Council to intensify the dialogue with the new US administration on global and digital tax policy with the aim of finding a common approach in the framework of the G20/OECD IF negotiations before June 2021; calls on the Council to oppose the ‘safe harbour’ clause, proposed by the US administration, which risks undermining the reform efforts;
Amendment 127 #
Motion for a resolution Paragraph 8 8. Calls on the Commission and the Council to intensify the dialogue with the new US administration on digital tax policy with the aim of finding a common approach in the framework of the G20/OECD IF negotiations before June 2021; calls on the Council to oppose the ‘safe harbour’ clause, proposed by the US administration, which seriously risks undermining the reform efforts;
Amendment 128 #
Motion for a resolution Paragraph 8 a (new) 8 a. Recognises that there are concerns that developing countries could not participate in the negotiations on an equal footing; calls for a major effort and political will in facilitating empowerment of all countries and a genuine inclusive mechanism indecision-making; Reiterates the Parliament’s support for the creation of an intergovernmental tax body within the framework of the UN, which should be well equipped and have sufficient resources and, where appropriate, enforcement powers, would ensure that all countries can participate on an equal footing in the formulation and reform of a global tax agenda 13e; _________________ 13eRecital 341, European Parliament resolution of 26 March 2019 on financial crimes, tax evasion and tax avoidance (2018/2121(INI)), https://www.europarl.europa.eu/doceo/doc ument/TA-8-2019-0240_EN.html
Amendment 129 #
Motion for a resolution Paragraph 8 b (new) 8 b. Welcomes the work of the United Nations Expert Committee on International Cooperation in Tax Matters to develop a new Article 12B for the UN Model Tax Convention on taxation of income from automated digital services, and calls on the UN, its Member States and the members of the committee to ensure that this work is completed before the end of the mandate of the current committee 13f; _________________ 13fUnited Nations Committee of Experts on International Cooperation in Tax Matters, Tax consequences of the digitalized economy – issues of relevance for developing countries, October 2020, https://www.un.org/development/desa/fina ncing/sites/www.un.org.development.desa. financing/files/2020- 10/CITCM%2021%20CRP.41_Digitalizati on%2010102020%20Final%20A.pdf
Amendment 13 #
Draft opinion Paragraph 3 Amendment 13 #
Motion for a resolution Citation 16 a (new) — having regard for the ongoing work of the United Nations Committee of Experts on International Cooperation in Tax Matters on the Tax Challenges Related to the Digitalization of the Economy,
Amendment 130 #
Motion for a resolution Paragraph 9 9. Welcomes the proposal of a dispute prevention and resolution mechanism, highlights the important role of the latter mechanism especially for the transitional period till the new international tax regime will be in place, but underlines that tax certainty is best achieved by establishing simple, clear and harmonised rules that prevent disputes in the first place;
Amendment 131 #
Motion for a resolution Paragraph 9 9.
Amendment 132 #
Motion for a resolution Paragraph 9 9. Welcomes the proposal of a dispute prevention and resolution mechanism
Amendment 133 #
Motion for a resolution Paragraph 9 9. Welcomes the proposal of a dispute prevention and resolution mechanism but underlines that tax certainty is best achieved by establishing simple, clear
Amendment 134 #
Motion for a resolution Paragraph 9 9.
Amendment 135 #
Motion for a resolution Paragraph 9 a (new) 9 a. Calls on the Commission to complete its own impact assessment on the effects of Pillars One and Two on revenue collection for the Member States and to inform the Council and Parliament about its findings; calls on the Commission, based on such impact assessment, to advise and guide Member States to take positions in the negotiations that defend the global interest and not just the self-interest of certain countries; emphasises that tax sovereignty is best achieved through international cooperation and harmonisation of certain essential features;
Amendment 136 #
Motion for a resolution Paragraph 9 a (new) 9 a. Recognizes the negative effects of international trade disputes, and regrets any shortfalls that might occur to other economic sectors due to retaliations that would not occur under an international agreement;
Amendment 137 #
9 b. Calls on each Member State and the Commission to make their position in the OECD discussions for Pillar 1 and Pillar 2 publicly known and to coordinate them so as to speak as one single voice;
Amendment 138 #
Motion for a resolution Subheading 3 A call for
Amendment 139 #
Motion for a resolution Paragraph 10 10. Regrets that the failure of the G20/OECD IF to find a solution in October 2020 will prolong the under-taxation of the digital economy; stresses that the COVID 19 pandemic has largely benefited digital businesses and accelerated the transition to a digital economy, thereby re-emphasising the need to reform the current tax system in order to ensure a fair contribution from the digital economy;
Amendment 14 #
Draft opinion Paragraph 3 3. Stresses that the IIA binds the Council, Parliament and the Commission to
Amendment 14 #
Motion for a resolution Citation 18 a (new) — having regard to the ongoing work of the United Nations Committee of Experts on International Cooperation in Tax Matters on Tax Consequences of the Digitalized Economy,
Amendment 140 #
Motion for a resolution Paragraph 10 10. Regrets that the failure of the G20/OECD IF to find a solution in October 2020 will prolong the under-taxation of the digitalized economy; stresses that the COVID 19 pandemic has largely benefited digital businesses and accelerated the transition to a digitalized economy, thereby re-emphasising the need to reform the current tax system in order to ensure a fair contribution from the digital economy; recalls that digital businesses are among companies that registered excess profits during the COVID-19 pandemic compared with previous years; highlights that governments need to collect unprecedented resources to recover from the COVID-19 crisis and the mobilisation of revenues from under-taxed sectors is therefore much needed;
Amendment 141 #
Motion for a resolution Paragraph 10 10.
Amendment 142 #
Motion for a resolution Paragraph 10 10. Regrets that the failure of the G20/OECD IF to find a solution in October 2020 will prolong the under-taxation of the digital economy; stresses that the COVID 19 pandemic has largely benefited digital businesses, mostly multinational digital companies that were able to scale their operations in minimum costs, and accelerated the transition to a digital economy, thereby re-emphasising the need to reform the current tax system in order to ensure a fair contribution from the digital economy;
Amendment 143 #
Motion for a resolution Paragraph 10 10. Regrets that the failure of the G20/OECD IF to find a solution in October 2020 will prolong the under-taxation of the digital economy; stresses that the COVID 19 pandemic has largely benefited digital businesses and accelerated the transition to a digital economy while many other businesses, notably SMEs, have suffered, thereby re-emphasising the need to reform the current tax system in order to ensure a fair contribution from the digital economy;
Amendment 144 #
Motion for a resolution Paragraph 10 10. Regrets that the failure of the G20/OECD IF to find a solution in October 2020 will prolong the under-taxation of the digital economy; stresses that the COVID 19
Amendment 145 #
Motion for a resolution Paragraph 10 10. Regrets
Amendment 146 #
Motion for a resolution Paragraph 10 10. Regrets that the failure of the G20/OECD IF to find a solution in October 2020 will prolong the under-taxation of the digital economy; stresses that the COVID 19 pandemic has largely benefited digital businesses and accelerated the transition to global and a digital economy, thereby re- emphasising the need to reform the current tax system in order to ensure a fair contribution from the global and digital economy;
Amendment 147 #
Motion for a resolution Paragraph 10 10. Regrets that the failure of the G20/OECD IF to find a solution in October 2020
Amendment 148 #
Motion for a resolution Paragraph 11 Amendment 149 #
Motion for a resolution Paragraph 11 11. Insists therefore that, regardless of the progress of the negotiations at the G20/OECD IF, the EU should stand ready to roll out its own solutions for taxing the digitalized and globalized economy by the end of 2021 at the latest, including the adoption of the CCTB and CCCTB proposals together with the revision of the definition of a permanent establishment; recalls that the latter proposals are key to set up an appropriate and modern corporate taxation system; calls on the Commission to present proposals by June 2021, while anticipating their compatibility with the reform by the G20/OECD IF to be agreed on; stresses the need to create a level playing field for providers of traditional services and digital services in the EU by ensuring that the latter are taxed at an adequate rate;
Amendment 15 #
Draft opinion Paragraph 3 3. Stresses that the IIA binds the Council, Parliament and the Commission to irreversibly move forward with an EU digital levy that will enter the long-term EU budget as an own resource and a long- term stable source of income, while restoring the EU budget and alleviating the fiscal pressure on national treasuries and EU citizens; underlines that, irrespective of whether the ground rules will be determined at OECD or EU level, revenues generated by digital taxation in the Member States will become an own resource;
Amendment 15 #
Motion for a resolution Recital A A. whereas current international corporate tax rules are based on principles which were developed in the early 20th century and are no longer suited to an increasingly globalised and digitalised economy, as modern taxation can no longer ignore the continuously innovative kinds of value- and wealth-creation generated by the growth of the digital economy;
Amendment 150 #
Motion for a resolution Paragraph 11 11.
Amendment 151 #
Motion for a resolution Paragraph 11 11. Insists th
Amendment 152 #
Motion for a resolution Paragraph 11 11. Insists th
Amendment 153 #
Motion for a resolution Paragraph 11 11. Insists therefore that, regardless of the progress of the negotiations at the G20/OECD IF, the EU should stand ready to roll out its own solutions for taxing the digitalised economy by the end of 2021; calls on the Commission to present proposals by June 2021, while anticipating their compatibility with the reform by the G20/OECD IF to be agreed on; stresses the need to create a level playing field for
Amendment 154 #
Motion for a resolution Paragraph 11 11. Insists th
Amendment 155 #
Motion for a resolution Paragraph 11 11. Insists therefore that, regardless of the progress of the negotiations at the G20/OECD IF, the EU should stand ready to roll out its own solutions for taxing the digital economy
Amendment 156 #
Motion for a resolution Paragraph 11 11. Insists therefore that, regardless of the progress of the negotiations at the G20/OECD IF, the EU should stand ready to roll out its own solutions for taxing the digitalised economy by the end of 2021; calls on the Commission to present proposals by June 2021, while anticipating their compatibility with the reform by the
Amendment 157 #
Motion for a resolution Paragraph 11 11. Insists therefore that, regardless of the progress of the negotiations at the G20/OECD IF, the EU should stand ready to roll out its own solutions for taxing the digital economy by the end of 2021; stresses the importance of ensuring that the outcome of the OECD/G20 IF negotiations does not prevent the EU and individual countries from taking more ambitious action; calls on the Commission to present proposals by June 2021, while anticipating their compatibility with the reform by the G20/OECD IF to be agreed on; stresses the need to create a level playing field for providers of traditional services and digital services in the EU by ensuring that the latter are taxed at an adequate rate; invites the Commission to consider in particular introducing a European Digital Services Tax as a necessary first step; the rate of the European Digital Service Tax should be set at 5%. It should apply to companies with total annual EU revenues above EUR 50 000 000. Taxable revenues should be those resulting from the provision of the following: (i) the placing on a digital interface of advertising targeted at users of that interface; (ii) the making available of multi-sided digital interfaces which allow users to find other users and to interact with them, and which may also facilitate the provision of underlying supplies of goods or services directly between users (sometimes referred to as "intermediation" services); (iii) the transmission of data collected about users and generated from such users' activities on digital interfaces (iv) the supply of digital content such as videos, audio or text; and (v) the sale of goods or services sold via a digital interface;
Amendment 158 #
Motion for a resolution Paragraph 11 11. Insists therefore that, regardless of the progress of the negotiations at the G20/OECD IF, the EU should stand ready to roll out its own solutions for taxing the digital economy by the end of 2021, especially since the OECD proposals concern only a narrow group of companies and may prove to be insufficient; calls on the Commission to present proposals by June 2021, while anticipating th
Amendment 159 #
Motion for a resolution Paragraph 11 11. Insists therefore that, regardless of the progress of the negotiations at the G20/OECD IF, the EU should stand ready to roll out its own solutions for taxing the global and digital economy by the end of 2021; calls on the Commission to present proposals by June 2021, while anticipating their compatibility with the reform by the G20/OECD IF to be agreed on; stresses the need to create a level playing field for providers of traditional services and digital services in the EU by ensuring that the latter are taxed at an adequate and fair rate; invites the Commission to consider in particular introducing
Amendment 16 #
Draft opinion Paragraph 3 3. Stresses that the IIA including the roadmap towards the introduction of new own resources, binds the Council, Parliament and the Commission to irreversibly move forward with an EU
Amendment 16 #
Motion for a resolution Recital A A. whereas current international corporate tax rules are based on principles which were developed in the early 20th century and
Amendment 160 #
Motion for a resolution Paragraph 11 11. Insists th
Amendment 161 #
Motion for a resolution Paragraph 11 11. Insists therefore that, regardless of the progress of the negotiations at the G20/OECD IF, the EU should stand ready to roll out its own solutions for taxing the digital economy by the end of 2021; calls on the Commission to present proposals by June 2021, while anticipating their compatibility with the reform by the G20/OECD IF to be agreed on;
Amendment 162 #
Motion for a resolution Paragraph 11 11.
Amendment 163 #
Motion for a resolution Paragraph 11 a (new) 11 a. Emphasises that EU digital companies when being subjected to existing European corporate taxes, as their headquarters is located in a EU Member State, are in disadvantage when compared to foreign companies that although having operations with European users, do not have a “physical presence” in any Member State, and therefore are exempt from the corporate taxes; Stresses the need to create a level playing field for providers of traditional services and digital services in the EU by ensuring that the latter are taxed at an adequate rate; invites the Commission to consider in particular introducing a European Digital Services Tax as a necessary first step;
Amendment 164 #
Motion for a resolution Paragraph 11 a (new) 11a. Stresses that the EU should nevertheless exercise caution in taking unilateral measures; observes that, if such measures were taken, it would be necessary to do more than simply pay lip service to the principle of national tax sovereignty of the Member States and the economically sound principle of tax competition and ensure that these measures did not result in higher burdens or more expensive services for consumers and SMEs;
Amendment 165 #
Motion for a resolution Paragraph 11 a (new) 11 a. Calls on the Commission to include or develop an additional proposal for an European excess profit tax (EEPT) to collect revenues from businesses that profit from the Covid-19 crisis, while the economy as a whole is in a severe downturn, with a view to finance the extraordinary public expenditure incurred by member states and the EU in reaction to the crisis;
Amendment 166 #
Motion for a resolution Paragraph 11 a (new) 11 a. Points out that a failure of the OECD negotiations will lead to further fragmentation in relation to digital taxes that might also be harmful for European companies that aim to expand their business model into other markets;
Amendment 167 #
Motion for a resolution Paragraph 11 b (new) 11 b. Stresses that any European Digital Services Tax must avoid unnecessary increases in compliance costs, providing clear definitions of taxable revenues and transparent provisions that are simple to abide and enforce, promoting legal and regulatory certainty; these must also include straightforward thresholds on the country-by-country economic revenue and user-based value creation to determine taxing rights, taking into consideration the size of each Member State market;
Amendment 168 #
Motion for a resolution Paragraph 11 c (new) 11 c. Calls for the adoption of proportionate rules to evade undermining SMEs, start-ups and companies that are engaged in the process of digitalising their businesses, as any further increase in their tax rates may stifle innovation and entrepreneurship; stresses that a growth-friendly tax policy aiming to strengthen the international competitiveness of the single market is needed;
Amendment 169 #
Motion for a resolution Paragraph 12 12. Understands that some Member States consider the taxation of digitalized economy an urgent issue and have therefore introduced digital services taxes at national level; recalls that these national measures should be phased out
Amendment 17 #
Draft opinion Paragraph 3 3. Stresses that the IIA binds the Council, Parliament and the Commission to irreversibly
Amendment 17 #
Motion for a resolution Recital A A. whereas current international corporate tax rules are based on principles which were developed in the early 20th century and are no longer suited to an increasingly globalised and digitalised economy, thus enabling several harmful tax practices that undermine public finances and fair competition;
Amendment 170 #
Motion for a resolution Paragraph 12 12. Understands that some Member States consider the taxation of digital economy an urgent issue and have therefore introduced digital services taxes at national level; recalls that these national measures should be phased out once a multilateral solution is found; calls on Member States to refrain from introducing national solutions unilaterally, as they create a risk of fragmentation of the single market; recalls that although taxation is primarily a Member State competence, they must exercise it in coherence with the common principles of EU law in order to ensure coherence between national frameworks, thereby allowing for fair competition and avoiding a negative impact on the overall coherence of EU taxation principles; notes that the procedure laid down in Article 116 of the Treaty on the Functioning of the European Union, under which Parliament and the Council act in accordance with the ordinary legislative procedure, may be applied if lack of regulatory harmonisation leads to market distortion within the Union;
Amendment 171 #
Motion for a resolution Paragraph 12 12.
Amendment 172 #
Motion for a resolution Paragraph 12 12.
Amendment 173 #
Motion for a resolution Paragraph 12 12. Understands that some Member States consider the taxation of digital economy an urgent issue and have therefore introduced digital services taxes at national level; recalls that these national measures
Amendment 174 #
Motion for a resolution Paragraph 12 12.
Amendment 175 #
Motion for a resolution Paragraph 12 12.
Amendment 176 #
Motion for a resolution Paragraph 12 12. Understands that some Member States consider the taxation of digital economy an urgent issue and have therefore introduced digital services taxes at national level; recalls that these national measures should be phased
Amendment 177 #
12. Understands that some Member States consider the taxation of digital economy an urgent issue and have therefore introduced digital services taxes at national level; recalls that these national measures should be phased out once a multilateral solution is found; calls on Member States to refrain from introducing national solutions unilaterally, as they create a risk of fragmentation of the single market; recalls that although taxation is primarily a Member State competence
Amendment 178 #
Motion for a resolution Paragraph 12 12. Understands that some Member States consider the taxation of large digital
Amendment 179 #
Motion for a resolution Paragraph 12 12. Understands that some Member States consider the taxation of digital economy an urgent issue and have therefore introduced digital services taxes at national level; re
Amendment 18 #
Draft opinion Paragraph 3 3. Stresses that the IIA binds the Council, Parliament and the Commission to
Amendment 18 #
Motion for a resolution Recital A A. whereas current international corporate tax rules are based on principles which were developed in the early 20th century and are no longer always suited to an increasingly globalised and digitalised economy;
Amendment 180 #
12. Understands that some Member States consider the taxation of digital economy an urgent issue and have therefore introduced digital services taxes at national level; recalls that these national measures should be phased out once a multilateral solution is found; calls on Member States to refrain from introducing national tax regimes for MNEs or tax solutions unilaterally, as they create a risk of fiscal dumping or fragmentation of the single market; recalls that although taxation is primarily a Member State competence, they must exercise it in coherence with the common principles of EU law in order to ensure coherence between national frameworks, thereby allowing for fair competition and avoiding a negative impact on the overall coherence of EU taxation principles;
Amendment 181 #
Motion for a resolution Paragraph 12 12. Understands that some Member States consider the taxation of digital economy an urgent issue and have therefore introduced digital services taxes at national level; recalls that these national measures should be phased out once a multilateral solution is found; calls on Member States to refrain from introducing national solutions unilaterally, as they create a risk of fragmentation
Amendment 182 #
Motion for a resolution Paragraph 12 12.
Amendment 183 #
Motion for a resolution Paragraph 12 12. Understands that some Member States consider the taxation of large digital
Amendment 184 #
Motion for a resolution Paragraph 12 a (new) 12 a. States that there must be uniform minimum standards in the EU for legally binding tax rulings with individual companies. Individual companies must not be granted tax advantages that other companies in a comparable situation are not granted. This currently represents a massive distortion of competition to the detriment of SMEs;
Amendment 185 #
Motion for a resolution Paragraph 12 a (new) 12 a. Highlights that national DSTs can be useful short term measures and a way to increase the incentives for finding a global solution;
Amendment 186 #
Motion for a resolution Paragraph 12 a (new) 12a. We should welcome national initiatives, in particular the initiative shown by France, as we await a European or an international solution which takes into account the specific nature of this taxation, with its law of 24 July 2019 establishing a tax on digital services;
Amendment 187 #
Motion for a resolution Paragraph 12 a (new) 12 a. Recalls that both under- and overtaxation have adverse effects on the proper functioning of the internal market;
Amendment 188 #
Motion for a resolution Paragraph 12 a (new) 12 a. Stresses that taxation is a national competence and that individual member states must not be pressured to adapt their taxes to any other Member State or regulations by the European Union;
Amendment 189 #
Motion for a resolution Paragraph 12 b (new) 12 b. Acknowledges the international dimension of digital services and their taxation and that the member states may benefit from coordinating their efforts to prevent fraud and tax evasion through the European Union;
Amendment 19 #
Draft opinion Paragraph 3 a (new) 3 a. Points out that the current tax rules no longer fit the modern global, digital, ecological and, societal demands in favour of fair taxation; underlines that the COVID 19 social and economic crisis boosts the digital transformation process, but reveals its losers and winners at the same time; in the current extremely difficult context, stresses that digital and digitalised multinational companies shall contribute to the social and economic recovery; therefore, underlines the need to reform and modernize the current tax system so to ensure a fair share to society from the digital economy and reinforce the sustainability of public finances in the long run;
Amendment 19 #
Motion for a resolution Recital A a (new) A a. whereas the current mechanisms of international corporate tax such as transfer pricing and the arm’s length principle are flawed, the digitalizing economy has exacerbated the problems already existing through an over-reliance by multinational companies on intangibles such as intellectual property;
Amendment 190 #
Motion for a resolution Paragraph 13 Amendment 191 #
Motion for a resolution Paragraph 13 Amendment 192 #
Motion for a resolution Paragraph 13 Amendment 193 #
Motion for a resolution Paragraph 13 13. Regrets that the Council did not agree on any of the Commission’s related proposals, i.e. the digital services tax, the significant digital presence or the CCTB and CCCTB; calls on the Member States to
Amendment 194 #
Motion for a resolution Paragraph 13 13.
Amendment 195 #
Motion for a resolution Paragraph 13 13. Re
Amendment 196 #
Motion for a resolution Paragraph 13 13.
Amendment 197 #
Motion for a resolution Paragraph 13 13.
Amendment 198 #
Motion for a resolution Paragraph 13 13.
Amendment 199 #
Motion for a resolution Paragraph 13 13. Regrets that the Council did not agree on any of the Commission’s related proposals, i.e. the digital services tax, the significant digital presence or the CCTB and CCCTB; calls on the Member States to reconsider their position on these proposals or to integrate them into a potential future implementation of Pillar I, and to consider all options provided for by the Treaties if no unanimous agreement can be reached;
Amendment 2 #
Draft opinion Paragraph 1 1. Welcomes the Interinstitutional Agreement on budgetary cooperation on cooperation in budgetary matters and on sound financial management, as well as on new own resources, including a roadmap towards the introduction of new own resources of
Amendment 2 #
Motion for a resolution Citation 4 Amendment 20 #
Draft opinion Paragraph 4 4.
Amendment 20 #
Motion for a resolution Recital A b (new) A b. whereas on average, in the EU, digital businesses face an effective tax rate of only 9.5%, compared to 23.2% for traditional business models; (1) (1) Source: Computations from the Impact Assessment of the European Commission, based on ZEW (2016, 2017) and ZEW et al. (2017).
Amendment 200 #
Motion for a resolution Paragraph 13 13. Regrets that the Council did not agree on any of the Commission’s related proposals, i.e. the digital services tax, the significant digital presence or the CCTB and CCCTB; calls on the Member States to reconsider their position on these proposals, in light of the unprecedented circumstances of the COVID-19 crisis, and to consider all options provided for by the Treaties if no unanimous agreement can be reached;
Amendment 201 #
Motion for a resolution Paragraph 13 13. Regrets that the Council did not agree on any of the Commission’s related proposals, i.e. the digital services tax, the significant digital presence or the CCTB and CCCTB;
Amendment 202 #
Motion for a resolution Paragraph 13 13.
Amendment 203 #
Motion for a resolution Paragraph 13 a (new) 13a. We should express deep regret that the digital services tax (DST), which was to cover 150 businesses (so far more than GAFAM) but would not have affected small businesses such as startups, was not adopted by the Council; the tax had the special feature of applying not to profits but to income generated by the sale of online advertising space or by the use of personal data;
Amendment 204 #
Motion for a resolution Paragraph 13 a (new) 13 a. Calls on the Member States to deliver on the Commission’s related proposals and to relaunch a high level political dialogue, within the Council, to guarantee a swift and effective decision- making process regarding digital taxation within the Single Market, regardless of the outcome of international negotiations;
Amendment 205 #
Motion for a resolution Paragraph 13 a (new) 13 a. Calls on the Commission to hold its commitment to use Article 116 of the TFEU for issuing proposals in taxation area, in order to circumvent the unanimity rule in Council and allow co- decision with the European Parliament; highlights that Article 116 TFEU would be a very effective legal basis to allow progress on such proposals, especially compared to the passerelle clause which itself requires unanimity;
Amendment 206 #
Motion for a resolution Paragraph 13 b (new) 13 b. Stresses that any new proposal should not come at the detriment of the adoption of the CCCTB; recognises indeed the advantages of the CCCTB proposal, in terms of simplicity and scope; invites therefore the Commission to consider how to better adapt the 2 BEPS Pillars to the CCCTB in case an agreement at the OECD is achieved; calls the Commission to revise the CCCTB proposal, if deemed necessary, taking into account new research and evidence available; recalls that the outcome of the OECD/G20 IF negotiations should not in any way prevent individual countries, and preferably the EU, from taking more ambitious actions;
Amendment 207 #
Motion for a resolution Paragraph 14 14.
Amendment 208 #
Motion for a resolution Paragraph 14 14. Notes the Commission inception impact assessment on a Digital Levy of 14 January 2021; calls on the Commission to carefully assess how the scope, definition and segmentation of digital activities, transactions, services or companies will be in line with international efforts to find a global solution; acknowledges the three tax policy options mentioned in the inception impact assessment, and asks for a detailed assessment on the impacts each option would have both in the single market and any possible trade retaliations from other economic actors;
Amendment 209 #
Motion for a resolution Paragraph 14 a (new) 14 a. Notes that the Commission intends to assess three baseline scenarios and is of the opinion that: (a) A corporate income tax (CIT) top-up to be applied to all companies conducting certain digital activities in the EU is an interesting option worth exploring as it would remain compatible with the ongoing international negotiations, would respect the various bilateral tax agreements and would allow CIT to take into account the significant higher profit margins of large digitalised multinationals; (b) A solution aiming at taxing profits rather than revenues would limit trade tensions, work towards a level playing field and have less negative impact on investments;notes however that, in the absence of an internationally agreed solution, taxing revenues remains an approach ensuring a minimum fair tax contribution is made; (c) A tax on digital transactions conducted business-to-business in the EU risk shifting the burden of the tax payment from large digitalised businesses to smaller companies relying on those services, therefore missing the initial objective making those firms pay a fair share of taxes;
Amendment 21 #
Draft opinion Paragraph 4 4. Reiterates that the EU digital levy will counter tax base erosion, ensure a level playing field and improve tax fairness by capturing mobile bases; considers that its revenues would be intricately linked to the open borders of the single market and the ‘digital Union’; underlines that any digital taxation should not lead to any inequalities between and within Member States; calls for a transparent and participatory process in the design of the EU digital levy; reiterates that any EU digital levy should not affect digital innovation, research on digital aspects, NGO’s and SME’s;
Amendment 21 #
Motion for a resolution Recital B B. whereas following the 2008-2009 financial crisis and a series of revelations of tax evasion practices, aggressive tax planning, tax avoidance and money laundering, the G20 countries agreed to address these issues globally at OECD level through the Base Erosion and Profit Shifting (BEPS) project, leading to the BEPS Action Plan and enabling both the link between business and location to be redefined by means of the concept of 'significant digital presence' and governments to apply withholding tax measures, thereby aiding the fight against tax evasion;
Amendment 210 #
14 a. Calls on the Commission to include in the impact assessment the impact a Digital Levy would have on the EU’s digital agenda, and to present a detailed plan to mitigate possible international trade disputes from the adoption of a European Digital Services Tax, and the possible spill over effects into other economic sectors;
Amendment 211 #
Motion for a resolution Paragraph 15 Amendment 212 #
Motion for a resolution Paragraph 15 Amendment 213 #
Motion for a resolution Paragraph 15 Amendment 214 #
Motion for a resolution Paragraph 15 Amendment 215 #
Motion for a resolution Paragraph 15 Amendment 216 #
Motion for a resolution Paragraph 15 15. Calls for a stronger role for Parliament in legislative procedures in the area of taxation; takes note of the Commission’s proposed roadmap to qualified majority voting in its communication entitled ‘Toward a more efficient and democratic decision-making in EU tax policy’; recognises at the same time that the Parliament has a co-decision role in areas indirectly strongly linked to a more fair taxation, like the statutory audit regulation. Underlines the important role various audit companies have played in tax scandals over the years. Calls therefore upon the EC to come forward with a reform of the statutory audit regulation EU 537/2014, introducing a strict legal and operational separation of audit from consulting services, as well as the setting up of mandatory ‘joint audit’ to enable firms outside the Big Four to develop the capacity needed to review the biggest companies;
Amendment 217 #
Motion for a resolution Paragraph 15 15.
Amendment 218 #
Motion for a resolution Paragraph 15 15. Calls for a stronger role for Parliament in legislative procedures in the area of taxation;
Amendment 219 #
Motion for a resolution Paragraph 15 15. Calls for a stronger role for Parliament in legislative procedures in the area of taxation; takes note of the Commission’s proposed roadmap to qualified majority voting in its communication entitled ‘Toward a more efficient and democratic decision-making in EU tax policy’; calls the Commission to be even more ambitious in this regard by exploring all options, including the use of Article 116 TFEU;
Amendment 22 #
Draft opinion Paragraph 4 4. Reiterates that the EU digital levy will counter tax base erosion, ensure a level playing field and improve tax fairness by capturing mobile bases; considers that its revenues would be intricately linked to the open borders of the single market and the ‘digital Union’ and would therefore constitute a highly suitable and genuine basis for an EU own resource; stresses that dedicating this new stream of public income to the EU budget would help resolve several problematic issues linked to fiscal equivalence, fiscal coherence and fair distributional impact across Member States;
Amendment 22 #
Motion for a resolution Recital C C. whereas the BEPS Action Plan has not succeeded in establishing
Amendment 220 #
Motion for a resolution Paragraph 15 15. Calls for a stronger role for Parliament in legislative procedures in the area of taxation; the Parliament and the Council should have equal weight in the decision making process regarding EU tax policy initiatives; takes note of the Commission’s proposed roadmap to qualified majority voting in its communication entitled ‘Toward a more efficient and democratic decision-making in EU tax policy’;
Amendment 221 #
Motion for a resolution Paragraph 15 15.
Amendment 222 #
Motion for a resolution Paragraph 15 15.
Amendment 223 #
15. Calls for a stronger role for Parliament in legislative procedures in the area of taxation;
Amendment 224 #
Motion for a resolution Paragraph 15 a (new) 15 a. Stresses the need for ensuring comprehensive and effective EU level public country by country reporting (CBCR) for all sectors; reiterates its urgent call on the Member States to break the deadlock within the Council and to conclude their first reading on the public CBCR proposal and to enter interinstitutional negotiations with Parliament in order to finalise the legislative process as soon as possible and to respect the principle of sincere cooperation as laid down in Article 4(3) of the Treaty on European Union (TEU) 13g; urgently calls on the Portuguese Presidency of the Council to seek a general approach and enter into interinstitutional negotiations with the European Parliament without delay; _________________ 13gEuropean Parliament, European Parliament resolution of 24 October 2019 on the state of play on the proposal for a directive of the European Parliament and of the Council amending Directive 2013/34/EU as regards disclosure of income tax information by certain undertakings and branches (2016/0107(COD)), known as public country-by-country reporting (2019/2882(RSP)), https://www.europarl.europa.eu/doceo/doc ument/TA-9-2019-0048_EN.html
Amendment 225 #
Motion for a resolution Paragraph 15 a (new) 15 a. Strongly encourages Member States to mandate the Commission to negotiate on their behalf any modification of their Double Tax Conventions, in order to uniformly adapt them in line with the agreement that would be found at international and/or at EU level, in particular as regards the definition of a permanent establishment and the creation of a taxable nexus for a significant digital presence;
Amendment 226 #
Motion for a resolution Paragraph 15 a (new) 15a. Notes that it is the implementation of competition law, as opposed to taxes, that effectively stimulates true competitiveness and innovation, and thus curtailing the omnipotence of certain digital multinationals; urges the Commission to continue to focus on this;
Amendment 227 #
Motion for a resolution Paragraph 15 b (new) 15 b. Highlights that the implementation of an efficient and comprehensive international reform will be eased by the access to country-by-country reporting information; notes that, to date, many countries do not have access to such information; welcomes the recent efforts of the Council Presidency on the Proposal for public country-by-country reporting;
Amendment 229 #
Motion for a resolution Paragraph 16 Amendment 23 #
Draft opinion Paragraph 4 4.
Amendment 23 #
Motion for a resolution Recital C C. whereas the BEPS Action Plan
Amendment 230 #
Motion for a resolution Paragraph 16 Amendment 231 #
Motion for a resolution Paragraph 16 16. Welcomes the conclusions of the European Council of 21 July 202
Amendment 232 #
Motion for a resolution Paragraph 16 16. Welcomes the conclusions of the European Council of 21 July 2021, which task the Commission with putting forward proposals for additional own resources including a digital levy. Before proposing a digital tax,the Commission must conduct a thorough impact assessment to assesses the impact on each Member State to ensure fairness in Member Statecontributions to the EU budget;
Amendment 233 #
Motion for a resolution Paragraph 16 16. Welcomes the conclusions of the European Council of 21 July 2021, which task the Commission with putting forward proposals for additional own resources including a digital levy; recalls that the collection of such additional own resources should be compatible with existing bilateral tax treaties and complementary to the ongoing international negotiations;
Amendment 234 #
Motion for a resolution Paragraph 16 16. Welcomes the
Amendment 235 #
Motion for a resolution Paragraph 16 16.
Amendment 236 #
Motion for a resolution Paragraph 16 16.
Amendment 237 #
Motion for a resolution Paragraph 16 16. Welcomes the conclusions of the
Amendment 238 #
Motion for a resolution Paragraph 16 16. Welcomes the conclusions of the European Council of 21 July 202
Amendment 239 #
Motion for a resolution Paragraph 16 16.
Amendment 24 #
Draft opinion Paragraph 4 4. Reiterates that the EU digital levy will
Amendment 24 #
Motion for a resolution Recital C C. whereas the BEPS Action Plan succeeded in establishing a
Amendment 240 #
Motion for a resolution Paragraph 16 a (new) 16 a. Supports the Interinstitutional Agreement on budgetary cooperation of 16 December 2020 and the legally binding commitment to introduce an EU digital levy as an own resource by 1 January 2023;
Amendment 241 #
Motion for a resolution Paragraph 16 a (new) 16 a. Stresses that any tax revenues by the EU must proportionally be channelled to the national budgets and not to the EU budget;
Amendment 242 #
Motion for a resolution Paragraph 17 Amendment 243 #
Motion for a resolution Paragraph 17 a (new) 17 a. Stresses that the new EU digital levy needs to contribute to the repayment of the EU Recovery Instrument while avoiding a reduction in future expenditure for other EU programmes;
Amendment 25 #
Draft opinion Paragraph 4 4. Reiterates that the EU digital levy
Amendment 25 #
Motion for a resolution Recital C a (new) C a. whereas OECD/G20 Base Erosion and Profit Shifting (BEPS) final report from 2015 concludes that the digital economy increasingly is becoming the economy itself, why it would be difficult, if not impossible, to ring-fence the digital economy from the rest of the economy for tax purposes;
Amendment 26 #
Draft opinion Paragraph 4 a (new) 4 a. Calls for an approach that will prevent the risks of double taxation as well as double non-taxation and that minimises compliance costs for European companies, in particular SMEs; calls for a tax design and implementation rules that would minimise the risks of any economic incidence being rolled over on EU citizens and consumers; is convinced that turning the proceeds of the digital tax into an own resources for the EU budget would help in dispersing and re- distributing such costs in an equitable manner across EU Member States;
Amendment 26 #
Motion for a resolution Recital E E. whereas the Commission put forward two proposals on the taxation of the digital economy in 2018, including a short-term solution introducing a digital services tax (DST), and a long-term solution defining a significant digital presence (SDP) as a nexus for corporate taxation which should replace the DST; whereas Parliament supported these proposals, but they were not adopted in the Council because Member States could not reach the unanimous agreement needed in the realm of taxation at EU level; whereas the Commission put forward a Proposal of 25 October 2016 for a Council Directive on a common consolidated corporate tax base (CCCTB) (COM(2016)0683); whereas the Commission put forward a proposal for a directive of the European Parliament and of the Council amending Directive 2013/34/EU as regards disclosure of income tax information by certain undertakings and branches (2016/0107(COD));
Amendment 27 #
Draft opinion Paragraph 4 b (new) 4 b. Stresses that a single set of harmonised rules and implementation procedures anchored in EU level legislation will result in lower administrative overhead costs for public tax collecting authorities in the Member States as well as vastly reduced compliance costs, in particular for digital business models that are scalable on the EU Single Market;
Amendment 27 #
Motion for a resolution Recital E E. whereas the Commission has put forward two proposals on the taxation of the digital economy in 2018, including a short-term solution introducing a digital services tax (DST), and a long-term solution defining a significant digital
Amendment 28 #
Draft opinion Paragraph 4 c (new) 4 c. Reminds that the own resources based on the EU digital levy and/or OECD rules are not to be formally earmarked for any particular expenditure item or fund; recalls that they will rather constitute general income and should be deemed to cover parts of the costs of the repayments of the NGEU;
Amendment 28 #
Motion for a resolution Recital E E. whereas the Commission put forward two proposals on the taxation of the digital economy in 2018, including a short-term solution introducing a digital services tax (DST), and a long-term solution defining a significant digital presence (SDP) as a nexus for corporate taxation which should replace the DST; whereas Parliament supported these proposals, but they were not adopted in the Council because Member States could not reach the unanimous agreement needed in the realm of taxation at EU level, which forced some Member States to introduce the DST unilaterally;
Amendment 29 #
Draft opinion Paragraph 5 5.
Amendment 29 #
Motion for a resolution Recital E E. whereas the Commission put forward two proposals on the taxation of the digital economy in 2018, including a temporary short-term solution introducing a digital services tax (DST), and a long- term solution defining a significant digital presence (SDP) as a nexus for corporate taxation which should replace the DST; whereas Parliament supported these proposals, but they were not adopted in the Council because Member States could not reach the unanimous agreement needed in the realm of taxation at EU level;
Amendment 3 #
Draft opinion Paragraph 1 1. Welcomes the Interinstitutional Agreement
Amendment 3 #
Motion for a resolution Citation 4 — having regard to the Commission proposals pending for adoption, in particular on the Common Corporate Tax Base (CCTB) , the Common Consolidated Corporate Tax Base (CCCTB)4 ,
Amendment 30 #
Draft opinion Paragraph 5 5. Maintains that the EU digital levy will be part of a basket of new own resources whose proceeds will be at least sufficient to cover, through the long-term EU budget, the future repayment costs
Amendment 30 #
Motion for a resolution Recital F F. whereas, in accordance with a mandate given by G20 Finance Ministers in March 2017 and following the adoption of a Programme of Work (PoW) in May 2019, the OECD/G20 Inclusive Framework on BEPS (IF), through its Task Force on the Digital Economy, has been working on a consensus-based global solution based on two pillars: Pillar One on the allocation of taxing rights through new profit allocation and nexus rules and Pillar Two on addressing the remaining BEPS issues and introducing measures to ensure a minimum effective level of tax;
Amendment 31 #
Draft opinion Paragraph 5 5. Maintains that the EU digital levy will be part of a basket of new own resources whose proceeds will be sufficient to cover, through the long-term EU budget, the repayment costs of the EU Recovery Instrument’s grants component, expected to be around EUR 15 billion per year on
Amendment 31 #
Motion for a resolution Recital F F. whereas, in accordance with a mandate given by G20 Finance Ministers in March 2017 and following the adoption of a Programme of Work (PoW) in May 2019, the OECD/G20 Inclusive Framework on BEPS (IF), through its Task Force on the Digital Economy, has been working on a
Amendment 32 #
Draft opinion Paragraph 5 5. Maintains that the EU digital levy will be part of a basket of new own resources whose proceeds will be sufficient to cover, at least, and through the long- term EU budget, the repayment costs of the EU Recovery Instrument’s grants component, expected to be around EUR 15 billion per year on average and EUR 29.25 billion maximum per year from 2028 until 2058,
Amendment 32 #
Motion for a resolution Recital F a (new) F a. whereas uncoordinated and distinct Digital Service Taxes, introduced by Member States, with different taxation rules and criteria, increases fragmentation within the European Single Market, creates more tax uncertainty and have less efficiency when compared with a common solution on the European level;
Amendment 33 #
Draft opinion Paragraph 5 5. Maintains that the EU digital levy will be part of a basket of new own resources whose proceeds will be at least sufficient to cover, through the long-term EU budget, the future repayment costs
Amendment 33 #
Motion for a resolution Recital F b (new) F b. whereas measures taken unilaterally by the Member States are susceptible to increase international trade disputes, which can affect both digital and non-digital businesses within the European Single Market;
Amendment 34 #
Draft opinion Paragraph 5 5. Maintains that the revenue of the EU digital levy will be part of a basket of new own resources whose proceeds will be sufficient to cover, through the long-term EU budget, the repayment costs of the EU Recovery Instrument’s grants component, expected to be around EUR 15 billion per year on average and EUR 29.25 billion maximum per year from 2028 until 2058, while avoiding a reduction in expenditure for EU programmes; notes that the revenue is estimated to be in the range of several billion
Amendment 34 #
Motion for a resolution Recital H H. whereas the lockdowns in response to the COVID-19 pandemic have accelerated the transition to an economy based on digital services, putting physical businesses at a further disadvantage
Amendment 35 #
Draft opinion Paragraph 5 5. Maintains that the EU digital levy will be part of a basket of new own resources whose proceeds will be sufficient to cover
Amendment 35 #
Motion for a resolution Recital H H. whereas the lockdowns in response to the COVID-19 pandemic have accelerated the transition to an economy based on digital services, putting physical businesses, and especially SMEs, at a further disadvantage while the profits of leading multinational companies in the digital sphere have increased; whereas there is an urgent need to act swiftly, taking into account the aim of the G20/OECD IF to conclude its negotiations in July 2021;
Amendment 36 #
Draft opinion Paragraph 5 5. Maintains that the EU digital levy will be part of a basket of new own resources whose proceeds
Amendment 36 #
Motion for a resolution Recital H a (new) H a. whereas the revenues of digital companies have skyrocketed over the last years while any potential revenue increases due to Pillar 1 are likely to be limited; whereas for a more equitable distribution of tax burdens the OECD process is therefore a good first step;
Amendment 37 #
Draft opinion Paragraph 5 a (new) 5 a. Considers that protecting and developing start-ups and SMEs offering digital services by providing them with a fair fiscal environment is of the utmost importance; calls, therefore, for a design of the EU digital levy that will not target companies with less than EUR 750 million of worldwide revenue and less than EUR 40 million of taxable revenue within the Union, and that will generate substantial revenue based on a meaningful scope of digital services, such as advertising and the sale of data for instance;
Amendment 37 #
Motion for a resolution Recital I I. whereas adequate international tax laws are a key for a fair and efficient taxation system addressing inequality and
Amendment 38 #
Draft opinion Paragraph 5 a (new) 5a. Notes that digital businesses are among those businesses which recorded an increase in profits during the COVID- 19 pandemic as compared with previous years; underlines that governments will have to raise unprecedented funds to recover from the COVID-19 crisis and that mobilising revenue from under-taxed sectors might help to avoid the imposition of austerity measures and a weakening of public services;
Amendment 38 #
Motion for a resolution Recital I I. whereas adequate international tax laws are
Amendment 39 #
Draft opinion Paragraph 5 a (new) 5 a. Welcomes the OECD approach to go beyond the “arm’s length principle”, and towards a unitary enterprise principle by focusing on the global profits of multinational enterprises; expects this approach to be firmly stated and to set a minimum tax rate at 25% in order to match the effective tax rate for traditional businesses in EU Member states2b and to avoid a fiscal race to the bottom; _________________ 2b https://ec.europa.eu/taxation_customs/site s/taxation/files/communication_taxation_ digital_single_market_en.pdf
Amendment 39 #
Motion for a resolution Recital I a (new) I a. whereas digital businesses rely heavily on intangible assets, particularly through the use and monetisation of user data, to create content, and this creation of value is not captured by the current tax systems; whereas this phenomena misaligns the place of value creation with the place of taxation;
Amendment 4 #
Draft opinion Paragraph 1 a (new) 1 a. Insists on the timely implementation of the roadmap towards the introduction of new own resources as agreed in the Interinstitutional Agreement in December 2020 and will not accept any delay by the Commission and Council;
Amendment 4 #
Motion for a resolution Citation 4 — having regard to the Commission proposals pending for adoption, in particular on the Common Corporate Tax
Amendment 40 #
Draft opinion Paragraph 5 a (new) 5 a. Notes that the Gross National Income (GNI)-based resource is the largest source of the EU budget; stresses the GNI-based resource is a simple, transparent, fair and democratically accountable own resource; underlines the GNI-based resource serves as a residual source to balance the EU-budget and therefore guarantees sufficient funding for the EU budget;
Amendment 40 #
Motion for a resolution Recital I a (new) I a. whereas Member States should closely collaborate and take a united, strong and ambitious position in international tax negotiations, the idea of competing through offering a lower tax environment being outdated and dangerous;
Amendment 41 #
Draft opinion Paragraph 5 a (new) 5a. Is concerned at an overly optimistic estimate of revenue with regard to the own resources to be created, which thereby shifts the burden of debt repayment to the Member States;
Amendment 41 #
Motion for a resolution Recital I a (new) I a. whereas the Interinstitutional Agreement on budgetary cooperation of 16 December 2020 (IIA) refers to a legally binding commitment towards the introduction of an EU digital levy as an own resource by 1 January 2023;
Amendment 42 #
Draft opinion Paragraph 5 a (new) 5 a. Recalls that any surplus from the repayment plan shall continue to serve the EU budget as general revenue;
Amendment 42 #
Motion for a resolution Recital I b (new) I b. whereas the lack of an international agreement or an European regulation on digital taxation is an obstacle for a more competitive and growth friendly business environment within the Digital Single Market;
Amendment 43 #
Draft opinion Paragraph 5 b (new) Amendment 43 #
Motion for a resolution Recital I b (new) I b. whereas the Interinstitutional Agreement on budgetary cooperation of 16 December 2020 (IIA) refers to a legally binding commitment towards the introduction of an EU digital levy as an own resource by 1 January 2023;
Amendment 44 #
Draft opinion Paragraph 5 b (new) 5 b. Recalls that digital businesses are among companies that registered excess profits during the COVID-19 pandemic compared with previous years; highlights that the EU need to recover from the COVID-19 crisis and repay the NGEU and the mobilisation of revenues from under-taxed sectors is therefore much needed;
Amendment 44 #
Motion for a resolution Recital I b (new) I b. whereas the Council Conclusions of 27 November state that the European Council will ‘assess the situation regarding the work on the important issue of digital taxation’ in March 2021;
Amendment 45 #
Draft opinion Paragraph 5 b (new) 5b. Considers that any minimum rate should be set at a fair and sufficient level to discourage profit shifting and prevent damaging tax competition; notes that the Independent Commission for the Reform of International Corporate Taxation recommends a rate of 25%;
Amendment 45 #
Motion for a resolution Recital I c (new) I c. whereas the OECD-led negotiations will be heavily discussed over the next months; whereas the Council Conclusions of 27 November state that the European Council will "assess the situation regarding the work on the important issue of digital taxation" in March 2021; whereas G20 Finance Ministers will meet on 7-8 April 2021 and 9-10 July 2021 and take stock of the negotiations of the Inclusive Framework on both Pillars of the international negotiations;
Amendment 46 #
Draft opinion Paragraph 5 c (new) 5 c. Reiterates that the introduction of a basket of new own resources, as provided for in the Roadmap towards the introduction of New Own Resources under the IIA, could facilitate a better focus of expenditure at Union level on priority areas and common public goods with high efficiency gains compared to national spending;
Amendment 46 #
Motion for a resolution Recital I c (new) I c. whereas the severe economic crisis that the European Union is facing require modern and intelligent tax policies that allow Member States to collect, in a more efficient and effective way, taxes due for activities pursued within the Single Market;
Amendment 47 #
Draft opinion Paragraph 5 c (new) 5c. Notes that company tax evasion is not limited to highly-digitalised companies; deplores the stress placed on companies which are in contact with consumers in the Pillar 1 proposal; notes that this seriously undermines the fairness and effectiveness of the desired outcome;
Amendment 47 #
Motion for a resolution Recital I c (new) I c. whereas G20 Finance Ministers will meet on 7-8 April 2021 and 9-10 July 2021 and take stock of the negotiations of the Inclusive Framework on both Pillars of the international negotiations;
Amendment 48 #
Draft opinion Paragraph 5 c (new) 5 c. Insist on the fact that introducing a EU-wide digital tax would help on fighting against tax avoidance and tax fraud and therefore protect the financial interest of the EU;
Amendment 48 #
Motion for a resolution Paragraph 1 1.
Amendment 49 #
Draft opinion Paragraph 5 d (new) 5 d. Firmly insists on the fact that introducing the digital tax should not in any way come at the detriment of the fulfilment of the objectives as set out in the IIA and the adoption of the other own resources included in it; believes that a harmonised minimum corporate tax system, through the introduction of the CCCTB, would benefit all businesses and especially SMEs by ensuring a level- playing field; calls for the introduction of the CCCTB even before the current envisaged date of 2026;
Amendment 49 #
Motion for a resolution Paragraph 1 1. Notes that the current rules date back to the early 20th century, and are mainly based on physical presence; points out that digitalis
Amendment 5 #
Draft opinion Paragraph 1 a (new) 1 a. Recalls that the Parliament reconfirmed its commitment to the introduction of an EU digital levy as an own resource with large majorities in a series of reports and resolutions1a; _________________ 1aMost notably its resolution of 14 March 2018 on the Reform of the European Union’s system of own resources, its interim report of 14 November 2018 on the multiannual financial framework 2021-2027 – Parliament’s position with a view to an agreement, its resolution of 10 October 2019 on the 2021-2027 multiannual financial framework and own resources: time to meet citizens' expectations, its resolution of 15 May 2020 on the new multiannual financial framework, own resources and the recovery plan, its resolution of 23 July 2020 on the conclusions of the extraordinary European Council meeting of 17-21 July 2020, its legislative resolution of 16 September 2020 on the draft Council decision on the system of Own Resources of the European Union, and the Interinstitutional Agreement of 16 December 2020 between the European Parliament, the Council of the European Union and the European Commission on budgetary discipline, on cooperation in budgetary matters and on sound financial management, as well as on new own resources, including a roadmap towards the introduction of new own resources;
Amendment 5 #
Motion for a resolution Citation 4 a (new) — having regard the conclusions of the European Council of 21 July 2020,
Amendment 50 #
Draft opinion Paragraph 5 d (new) 5 d. Reaffirms its position concerning the collecting costs, which should be set at 10% of their original rate and warns about any amount that works against the EU budget and the repayment of the EU’s debts;
Amendment 50 #
Motion for a resolution Paragraph 1 1. Notes that the current international tax rules date back to the early 20th century, and that taxing rights are mainly based on the physical presence of companies; points out that digitalised companies as well as companies relying heavily on intangible assets can engage in significant business activities in a jurisdiction without physical presence there, and therefore taxes paid in one jurisdiction no longer reflect the value and profits created there
Amendment 51 #
Draft opinion Paragraph 6 Amendment 51 #
Motion for a resolution Paragraph 1 1. Notes that the current rules date
Amendment 52 #
Draft opinion Paragraph 6 6. Urges the Commission to incorporate Parliament’s position when preparing the legislative proposals for an EU digital levy as an own resource and the revised own resources decision and calls on the Council to swiftly adopt the proposal in line with the roadmap
Amendment 52 #
Motion for a resolution Paragraph 1 1. Notes that the current rules date back to the early 20th century, and are mainly based on physical presence; points out that in current globalised economy, multinationals and particularly digitalised companies can engage in significant business activities in a jurisdiction without physical presence there, and therefore taxes paid in one jurisdiction no longer reflect the value and profits created there; regrets that the traditional concept of permanent establishment fails to cover the new aspects of global and digital businesses, and underlines the need to define virtual
Amendment 53 #
Draft opinion Paragraph 6 6. Urges the Commission to incorporate Parliament’s position when preparing the legislative proposal for an EU digital levy as an own resource and calls on the Council to swiftly adopt the proposal in line with the agreed roadmap.
Amendment 53 #
Motion for a resolution Paragraph 1 1. Notes that the current rules date back to the early 20th century, and are mainly based on physical presence; points out that digitalised companies can engage in significant business activities in a jurisdiction without physical presence there, and therefore taxes paid in one jurisdiction no longer reflect the value and profits created there;
Amendment 54 #
Motion for a resolution Paragraph 1 1. Notes that the current rules date back to the early 20th century, and are mainly based on physical presence; points out that digitalised companies can engage in significant business activities in a jurisdiction without physical presence
Amendment 55 #
Motion for a resolution Paragraph 1 1. Notes that the current rules date back to the early 20th century, and are mainly based on physical presence; points out that digitalised companies can engage in significant business activities in a jurisdiction without physical presence there, and therefore taxes paid in one jurisdiction no longer reflect the value and
Amendment 56 #
Motion for a resolution Paragraph 1 a (new) 1 a. Notes that sale and consumption are not considered to be a part of the value creation of a product; notes that value creation is linked to production and R&D; notes that consumption is taxed with VAT or consumption taxes; highlights that if the concept of value creation is widened out, small exporting countries risk losing tax revenue to larger consumer facing markets creating a fundamental shift in taxation between various EU member countries;
Amendment 57 #
Motion for a resolution Paragraph 1 a (new) 1 a. Stresses that new solutions to taxing the digital economy must be compatible with the existing principles of corporation taxation; points out that a digital tax should therefore tax profits, not revenues;
Amendment 58 #
Motion for a resolution Paragraph 1 a (new) 1 a. Emphasises the potential of the digital economy regarding creation of value, qualified work opportunities, education and benefits for consumers, highlights therefore that these activities should be enabled rather than hampered; Considers it as highly problematic that the EU is in search of new taxable sources, in order to be able to pay for its massive increase of expenditures and debts;
Amendment 59 #
Motion for a resolution Paragraph 1 b (new) Amendment 6 #
2. Regrets the OECD’s failure to find consensus on digital taxation by the end of 2020 as planned; notes with interest recent signs of progress towards a common approach in some G20 states, given that a global solution would be the most effective and can avert risks of retaliation, if any, by third countries against the Member States and European businesses; observes that the present economic context, in which many multinational corporations specialised in digital services continue to generate profits despite the general recession, leads to a broad demand to ensure a level playing field by the public and the enterprises; considers it therefore timely and necessary that the EU spearheads concrete, tangible and irreversible legislative action in the coming months to drive forward and incentivise international efforts for more tax fairness through the EU digital levy and the international negotiations, even in case no agreement can be reached at the OECD level;
Amendment 6 #
Motion for a resolution Citation 5 Amendment 60 #
Motion for a resolution Paragraph 2 2. Regrets the shortcomings of the international tax system, which is unfit for properly addressing the challenges of globalisation and digitalisation; calls for an international agreement aiming for a fair and effective tax system; calls for a deep reform of the tax system as a whole that is largely flawed, in particular due to the transfer pricing fiction that enables tax fraud and tax avoidance; highlights the need to tax multinational corporations on the basis of their global consolidated profits instead, treating corporate groups as single entities for tax purposes, with taxing rights being allocated between countries based on a fair and effective formula; recalls that the Commission proposal on a common consolidated corporate tax base (CCCTB) aims to introduce such a system within the EU; deplores the fact that the Member States were not able to agree on this proposal yet; calls on the Council to swiftly adopt the CCTB and CCCTB proposals;
Amendment 61 #
Motion for a resolution Paragraph 2 2. Regrets the shortcomings of the international tax system, which is unfit for properly addressing the challenges of globalisation and digitalisation; calls for an international agreement aiming for a fair and effective tax system; however recalls that a pure digital tax in form of an additional tax like a "second sales tax" cannot be the solution to this problem. Urges the European Union to insist of an international approach as the European approach for a DST or DAT based on a tax substrate where the users are located does not appropriately consider the large number of additional users outside the EU, e.g. in Asian countries, and harms the competitiveness of European companies;
Amendment 62 #
Motion for a resolution Paragraph 2 2.
Amendment 63 #
Motion for a resolution Paragraph 2 2. Regrets the shortcomings of the international tax system, which is unfit for properly addressing the challenges of globalisation and digitalisation; welcomes recognition of the value of taxing multinational corporations on the basis of their global consolidated profits, with taxing rights being allocated between governments based on an agreed formula; recalls that the Commission proposal on a common consolidated corporate tax base (CCCTB) (COM(2016)0683) aims to introduce such a system within the EU; deplores the fact that the Member States were not able to agree on a joint approach regarding the C(C)CTB; calls for an international agreement aiming for a fair and effective tax system;
Amendment 64 #
Motion for a resolution Paragraph 2 2. Regrets the shortcomings of the international tax system, which is
Amendment 65 #
Motion for a resolution Paragraph 2 2. Regrets the shortcomings of the international tax system, which is unfit for properly addressing the challenges of globalisation and digitalisation; calls for an international agreement aiming for a fair and effective tax system; stresses that the European Union and its Member States should take the lead in responding to those shortcomings;
Amendment 66 #
Motion for a resolution Paragraph 2 2. Regrets the shortcomings of the international tax system, which is unfit for properly addressing the challenges of globalisation and digitalisation; highlights the need for the recognition of user participation as source of taxable value and calls for an international agreement aiming for a fair and effective tax system;
Amendment 67 #
Motion for a resolution Paragraph 2 2. Re
Amendment 68 #
Motion for a resolution Paragraph 2 a (new) 2 a. Regrets that the approaches outlined the Blueprints for Pillar One and Pillar Two would largely maintain the existing transfer pricing system; Regrets that the approach proposed by Pillar Two gives priority to residence country rules; Recalls the Parliament’s support for balance between source and residence country taxation rights 13a; _________________ 13aRecital 341, European Parliament resolution of 26 March 2019 on financial crimes, tax evasion and tax avoidance (2018/2121(INI)), https://www.europarl.europa.eu/doceo/doc ument/TA-8-2019-0240_EN.html
Amendment 69 #
Motion for a resolution Paragraph 2 b (new) 2 b. Notes that corporate tax avoidance is not limited to highly digitalised companies; regrets the focus on consumer facing businesses in the Pillar 1 proposal; Notes that this severely undermines the fairness and effectiveness of the proposed outcome 13b; _________________ 13bRecital 14, European Parliament resolution of 18 December 2019 on fair taxation in a digitalised and globalised economy: BEPS 2.0 (2019/2901(RSP))
Amendment 7 #
Draft opinion Paragraph 2 2. Regrets that the OECD’s failure to find consensus on digital taxation by the end of 2020 as planned
Amendment 7 #
Motion for a resolution Citation 5 a (new) — having regard to the Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions of 19 February 2020 entitled “Shaping Europe’s digital future” (COM/2020/67),
Amendment 70 #
Motion for a resolution Paragraph 3 3. Highlights the need to address the under-taxation of the digital economy, while ensuring a fair distribution of taxing rights among all countries where the value creation of multinational digital companies takes place;
Amendment 71 #
Motion for a resolution Paragraph 3 3. Highlights the need to
Amendment 72 #
Motion for a resolution Paragraph 3 3. Highlights the need to address the under-taxation of
Amendment 73 #
Motion for a resolution Paragraph 3 3. Highlights the need to
Amendment 74 #
Motion for a resolution Paragraph 3 3. Highlights the need to address the under-taxation of the digital economy, when compared to the traditional economy, while ensuring a fair distribution of taxing rights among all countries where the value creation of multinational digital companies takes place;
Amendment 75 #
Motion for a resolution Paragraph 3 3. Highlights the need to address the under-taxation of the digital and global economy, while ensuring a fair distribution of taxing rights among all countries where the value creation of multinational and particularly digital companies takes place;
Amendment 76 #
Motion for a resolution Paragraph 3 3. Highlights the need to address the under-taxation of the digital economy, while ensuring a fair distribution of taxing rights among all countries where the economic activity and value creation of multinational digital companies takes place;
Amendment 77 #
Motion for a resolution Paragraph 3 3. Highlights the need to address the under-taxation of the digitalised economy, while ensuring a fair distribution of taxing rights among all countries where the value creation of multinational digital companies takes place;
Amendment 78 #
Motion for a resolution Paragraph 3 3. Highlights the need to address the under-taxation of the digital economy,
Amendment 79 #
Motion for a resolution Paragraph 3 a (new) 3 a. Highlights that the assumption of digital companies not paying their fair share of tax is contested1a; urges in this regard to have a factual approach to the issue and potential need for a digital tax; regrets the biased approach to digital companies; _________________ 1aSee European Centre for International Political Economy (ECIPE): Digital Companies and Their Fair Share of Taxes: Myths and Misconceptions.https://ecipe.org/wp- content/uploads/2018/02/ECI_18_Occasio nalPaper_Taxing_3_2018_LY08.pdf
Amendment 8 #
Draft opinion Paragraph 2 2. Regrets the OECD’s failure to find consensus on digital taxation by the end of 2020 as planned; stresses that in the absence of a fair taxation in the digital economy at global level, the EU must lead the way and ensure that such a taxation is implemented at the EU level; recalls that on average, digital businesses face an effective tax rate of only 9.5%, compared to 23.2% for traditional business models1a; _________________ 1a Computations from the Impact Assessment of the European Commission, based on ZEW (2016, 2017) and ZEW et al.(2017).
Amendment 8 #
Motion for a resolution Citation 10 Amendment 80 #
Motion for a resolution Paragraph 3 b (new) 3 b. Highlights that the OECD/G20 Base Erosion and Profit Shifting (BEPS) final report from 2015 concludes that the digital economy increasingly is becoming the economy itself, why it would be difficult, if not impossible, to ring-fence the digital economy from the rest of the economy for tax purposes;
Amendment 81 #
Motion for a resolution Paragraph 4 4. Notes that on average digital business models face significantly lower effective tax rates than traditional business models which rely on physical presence; regrets that tax avoidance linked to aggressive tax planning is not only detrimental to the collection of public revenues but also puts businesses, especially SMEs, at a disadvantage, while creating barriers for new local entrants; considers it unacceptable for digital businesses to pay tax on profits at an average rate of 9% whilst the rate for businesses in the traditional economy is 23% and that for GAFAM in particular (Google, Amazon, Facebook, Apple, Microsoft) is 1%;
Amendment 82 #
Motion for a resolution Paragraph 4 4. Notes that, on average, digital business models face significantly lower effective tax rates than traditional business models which rely on physical presence; regrets that tax avoidance linked to aggressive tax planning is not only detrimental to the collection of public revenues
Amendment 83 #
Motion for a resolution Paragraph 4 4. Notes that on average digital business models face significantly lower effective tax rates than traditional business models which rely on physical presence; regrets that tax avoidance linked to aggressive tax planning is
Amendment 84 #
Motion for a resolution Paragraph 4 4. Notes that on average digital business models face significantly lower effective tax rates than traditional business models which rely on physical presence; regrets that tax avoidance linked to aggressive tax planning is not only detrimental to the collection of public revenues but also puts businesses, especially SMEs, at a disadvantage, while creating barriers for new local entrants; recalls that the issue of under-taxation of the digital economy is particularly relevant today, in the light of the COVID- 19 crisis, which has put digital companies providing services remotely in a more favourable position than traditional businesses, especially SMEs;
Amendment 85 #
Motion for a resolution Paragraph 4 4. Notes that on average digital business models face significantly lower effective tax rates than traditional business models which rely on physical presence; regrets that tax avoidance linked to aggressive tax planning is not only detrimental to the collection of public revenues but also puts businesses, especially SMEs, at a disadvantage, while creating barriers for new local entrants; highlights the need to consider potential SME entry-barriers when proposing regulation in the digital area in order to avoid creating a sector with only a few big actors;
Amendment 86 #
Motion for a resolution Paragraph 4 4. Notes that on average digital business models face significantly lower
Amendment 87 #
Motion for a resolution Paragraph 4 4. Notes that on average digital business models face significantly lower effective tax rates than traditional business models which rely on physical presence; recalls that on average, digital businesses face an effective tax rate of only 9.5%, compared to 23.2% for traditional business models; regrets that tax avoidance linked to aggressive tax planning is not only detrimental to the collection of public revenues but also puts businesses, especially SMEs, at a disadvantage, while creating barriers for new local entrants;
Amendment 88 #
Motion for a resolution Paragraph 4 4. Notes that on average global and digital business models face significantly lower effective tax rates than traditional business models which rely on physical presence; regrets that tax avoidance and fraud linked to aggressive tax planning is not only detrimental to the collection of public revenues but also puts businesses, especially SMEs, at a disadvantage, while creating barriers for new local entrants;
Amendment 89 #
Motion for a resolution Paragraph 4 4. Notes that on average digital business models face significantly lower effective tax rates than traditional business models which rely on physical presence; regrets that tax avoidance
Amendment 9 #
Draft opinion Paragraph 2 2. Regrets the OECD’s failure to find consensus on digital taxation by the end of 2020 as planned, whereas several Member States have already introduced their digital tax; this shows the need to restore fairness to the taxation of digital businesses;
Amendment 9 #
Motion for a resolution Citation 12 a (new) — having regard for the option of negotiating a UN Tax Convention, as noted in the United Nations Financing for Development in the Era of COVID-19 and Beyond finance ministers’ discussion paper in September 2020 11a , _________________ 11aUnited Nations, Financing for Development in the Era of COVID-19 and Beyond, Menu of Options for the Considerations of Ministers of Finance Part II, September 2020, pp 123 – 123, https://www.un.org/sites/un2.un.org/files/ part_ii- _detailed_menu_of_options_financing_fo r_development_covid19.pdf
Amendment 90 #
Motion for a resolution Paragraph 4 4.
Amendment 91 #
4 a. Highlights that digitalisation affects the whole economy, and many firms use multi-channel models, thus, instead of creating special regimes for digital businesses, international tax rules should be reformed, based on a principal of neutrality between different business models, both digital and non-digital, but also regardless of the extent or form of digitalisation, including multi-channel models; adopting an approach to taxation of corporations which would treat them in accordance with the economic reality that they operate as global firms 13c; _________________ 13cBEPS Monitoring Group comment to the HM Treasury Consultation on CORPORATE TAX AND THE DIGITAL ECONOMY, of January 2018.
Amendment 92 #
Motion for a resolution Paragraph 4 a (new) 4 a. Recognizes the rapid digitalisation of most economic sectors and the need for a future-proof tax system, that does not ring-fence the digital economy, but ensures a fair distribution of revenues across the different countries where value is created;
Amendment 93 #
Motion for a resolution Paragraph 4 a (new) 4a. We should request the introduction of safeguards to ensure that any additional taxation of the digital businesses referred to in the text does not result in any additional economic burden on their clients;
Amendment 94 #
Motion for a resolution Paragraph 4 b (new) 4 b. Notes the importance in distinguishing the role of both taxation and regulation, and that future digital tax policies should not be formulated to correct deficiencies in the digital economy, such as rents from monopoly power over information, being regulatory measures more appropriate instead;
Amendment 95 #
Motion for a resolution Paragraph 5 5. Welcomes the efforts in the G20/OECD IF to reach a global consensus on a multilateral reform of the international
Amendment 96 #
Motion for a resolution Paragraph 5 5. Welcomes the efforts in the G20/OECD IF to reach a
Amendment 97 #
Motion for a resolution Paragraph 5 5. Welcomes the efforts in the G20/OECD IF to reach a global consensus on a multilateral reform of the international tax system to address the challenges of the digitalised economy; regrets, however, the missed deadline fixed on the end of the year 2020 to reach an agreement; acknowledges the progress of discussions on the proposals at technical level, despite the delays caused by the COVID-19 pandemic, and calls for a swift agreement by mid-2021; highlights the value of the G20/OECD IF for guaranteeing multilateral solutions and finding support at the global and EU level;
Amendment 98 #
Motion for a resolution Paragraph 5 5.
Amendment 99 #
Motion for a resolution Paragraph 5 5. Welcomes the efforts in the G20/OECD IF to reach a global consensus on a multilateral reform of the international tax system to address the challenges of continued profit shifting and the digitalised economy; acknowledges the progress of discussions on the proposals at technical level, despite the delays caused by the COVID-19 pandemic, and calls for a swift agreement by mid-2021; highlights the value of the G20/OECD IF for guaranteeing multilateral solutions and finding support at the global and EU level;
source: 680.807
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